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CITY OF MORGAN HILL
FY 16-17 and 17-18
OPERATING AND CIP BUDGET
CITY OF MORGAN HILL
FY 16-17 and 17-18
OPERATING AND CIP BUDGET
CITY OF MORGAN HILL
FY 16-17 and 17-18
CITY OF MORGAN HILL
FY 16-17 and 17-18
OPERATING AND CIP BUDGET
CITY OF MORGAN HILL
FY 16-17 and 17-18
OPERATING AND CIP BUDGET
CITY OF MORGAN HILL
FY 16-17 and 17-18
OPERATING AND CIP BUDGET
CITY OF MORGAN HILL
*Amount includes $705,000 from several legacy assessment districts
To address this reality, the City Council conducted a study session in July 2015 entitled “Best Practices Used
by Successful Cities in Preparing for Potential Ballot and/or Revenue Enhancement Measures.” At the
conclusion of the study session, Council directed staff to engage the community on quality of life services
and fiscal issues. Additionally, a global overview of the timing of presenting potential ballot or revenue
solutions should reflect the community’s perspective. In July 2016, staff will provide the Council with a
report on the community’s priorities. At that time, the Council will consider if it should ask the community
to consider options for funding its quality of life priorities. It is important to note that the Council has yet to
make this decision and no new revenues are assumed in the Adopted budget or five year forecast.
Personnel
The City’s full-time and part-time employees are one of the most important resources for the delivery of its
high quality services. Annual investments in personnel account for approximately $33.5 million or 26
percent of organizational wide expenses in FY 16-17 and $34.9 million or 28 percent in FY 17-18. Of this dollar
amount, 67 percent is related to salaries and the remaining 33 percent is attributed to benefits (health
insurance, retirement, etc.). As a percent of total costs, Morgan Hill continues to contain its personnel
expenses due to the fact that it has a long and successful history of working with other organizations to
collaboratively deliver services; most notably, with the YMCA for recreation services, Cal Fire for fire/
emergency medical services, and the City of Gilroy for wastewater services. This results in lower personnel
costs now and into the future, which are partially offset by an increase in current contractual services. This
use of non-City personnel leads to no additional obligation for future employee benefits and retirement.
As a result of the 2013 labor negotiations, the Council adopted Management Resolution and Council-
Appointed Officer contracts, all City employees now equally share any annual increases to the City’s
retirement (CalPERS) contribution rates. A continued special thanks to all employees is deserved for
working collaboratively with the City. Their actions demonstrated their dedication and commitment to the
Morgan Hill community and, as importantly, their understanding that fiscal sustainability into the future
requires the City and its employees to share the burden. This significant change has and will continue to
positively impact the City’s ability to meet the community’s service level needs and should not go
unnoticed.
The Council’s Long-Term Labor Policy, Principles, and Strategies’ Principle No. 4 – Fiscal Sustainability and
Economic Climate states that “all compensation commitments must be made consistent with principles of
fiscal sustainability and to ensure the City’s long term success in achieving its mission.” As part of this
principle, “the City will strive to hire contract employees instead of full-time benefitted employees to allow
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
$2.7M*
$1.3M $1.4M $.06M $0.6M $0.6M
Pavement Investment